Low fare killer Ryanair CEO lets go of his American dream
I don’t believe long-haul, low fares, no-frills works. Because there’s always going to be 10 per cent or 15 per cent of the market in long haul who will pay whatever it costs for a business-class service. Michael O’Leary Ryanair Holdings CEO
FOR AT least a decade, Ryanair Holdings CEO Michael O’Leary dreamed about coming to America, bringing the Irish carrier’s low fares to the other side of the pond. Expand west to the largest aviation market. Price the cheapest seats at US$10. Offer business class up front for those willing to pay.
A leader among ultra low-cost airlines, Ryanair had global ambitions.
The trans-Atlantic routes have long been the province of the largest full-service carriers, which fill their premium cabins with the rich and famous and famously rich.
As one of Europe’s biggest airlines, any move by Ryanair into that world could have further upended fares by adding more capacity to an already crowded field. Yet O’Leary always found a reason not to pull the trigger.
“I don’t believe long-haul, low fares, no-frills works,” he said in 2008. “Because there’s always going to be 10 per cent or 15 per cent of the market in long haul who will pay whatever it costs for a business-class service.” Despite periodic teases of new US flights, Ryanair never moved to acquire any aircraft model beyond the Boeing 737s it flies exclusively.
In 2015, Ryanair made noises again, this time causing a stir when it said board members had approved plans to move ahead with trans-Atlantic flights-a logical progression given the airline’s steady growth. That led to a reversal three days later (a delay the company blamed partly on St. Patrick’s Day observances) when directors quashed the notion with a terse statement: “In the light of recent press coverage, the board of Ryanair Holdings P.L.C. wishes to clarify that it has not considered or approved any trans-Atlantic project and does not intend to do so.”
But now it’s 2017, and probably too late for different reasons. Much has changed over the Atlantic in recent years amid a sharp decline in jet fuel prices. The trans-Atlantic market now sees a surge of low-cost flying from the likes of Norwegian Air, WOW Air, WestJet Airlines Ltd., and Air Canada’s discount Rouge unit. Air Canada itself has bolstered international flying, too. Even JetBlue Airways Corp. is mulling whether to cross the ocean.
For now, Ryanair has shelved its trans-Atlantic plans and is scouring growth opportunities closer to home. The Dublinbased carrier, which carries about 116 million passengers annually, has its sights set on 200 million by 2024 with almost 400 new Boeing aircraft on order.
“As there is plenty of capacity and growth opportunities for Ryanair in Europe, we are solely focused on European growth currently,” Ryanair spokesman Robin Kiely said in an email.
For years, O’Leary cited an inability to acquire a fuelefficient aircraft for Atlantic routes. Ryanair was unlikely to get a price from manufacturers it would like, he explained in a 2014 interview with Bloomberg, due to the market popularity of new, more fuel-efficient aircraft like Boeing Co.’s 787. — WP-Bloomberg